When your sales are dependent on another business

How can you plan effectively and deliver your products profitably when they are totally dependent on the uptake of another company’s products?

This is the situation that Adina Jacobs, co-founder of STM Goods, has dealt with for almost two decades.

As a manufacturer of accessories for personal technologies – including phones, laptops and tablets, Adina’s products and sales are entirely dependent on the dimensions, usability and uptake of products produced by major companies including Apple and Microsoft.

“A lot has to do with the technology. I mean, at the end of the day, when we talk about seasons, we're talking about launching in time for device launches. Seasons for us are not like summer, winter, autumn, spring,” explains Adina.

The big problem

The problem, of course, is that technology providers are understandably very protective of their intellectual property (IP), and guard even the product dimensions very closely until the product is publicly launched.

As such, Adina says her business is forced to await their public release before they can even begin prototyping accessories for them.

“We don't even do that,” she says when asked if she scours for leaks online to get a heads up on product specs.

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“You can't trust those sources. You need to just make sure that you've got the actual device and then follow that.”

However, Adina suggests this delay in getting products to market can actually be a good thing for her business, as it gives her time to scope the popularity of a new product before making big investments in developing her own new products to complement them.

“The iPad's a good example. We didn't launch any new product with iPad 1. I mean, you hear about it and you read about it, and we read, too, but you can't take a risk like that. So we waited. We saw iPad 1, we saw how people were using the device. We really spent a lot of time examining how people use their devices,” explains Adina.

“Then we developed something for iPad 1. We designed everything around the previous device, kept it in our back pocket. Then once the legitimate specs were available for the iPad 2, we pulled out our draw plans and designed it, and then eight to 10 weeks later, we've got product on shelf that suits the new device.”

Knowing your market

As Adina explains, it is crucial to fully know and understand your target market, and their wants and needs.

“In the consumer electronics space, people aren't at the very edge of fashion, so you can't be too fashion-forward and scare people off,” she points out.

“Then you've got to remember where we're selling the product: places like JB Hi-Fi and other major department stores and other consumer electronics retailers, where people are not necessarily going to buy their fashion products. So you need to smartly combine a measure of conservatism with something that's a little bit different and unique.

“We look at what the needs of the consumers are and then we kind of inject our own look into it, our own materials, and our own way of doing things, while at the same time taking into consideration very heavily what the device is designed to do.”